In history and mythology, succession was often by capture, if not chance. If the princess or the elephant does not favour with a garland as in the Puranas, it had to be through violence as in history. The Mughal dynasty, the Quli-Qutub Shah dynasty and even the Roman empire give us vivid stories on how it was easy to succeed by brute force including patricide and fratricide. However, democratic institutions and the concepts of efficiency and common good have demanded a better system of succession - a system that is predictable, transparent, objective and effective. Succession, in this ideal, requires to be planned well and transparently. It forms an important part of corporate governance.

Good governance entails planning for an effective succession to the CEO so that the organization grows in the direction and with the pace and in a manner that will benefit the community of shareholders and the important stakeholders. Such a Chief Executive is required to not merely understand the wishes of the controlling groups but even convince them, inspire a new vision, reinvent the strategy and motivate all the resources to be able to implement the new strategy. Such a succession can be achieved by an iterative sequence and a due process that evokes the best of every one’s judgment and an objective perspective keeping the long-term interests of shareholders and the important stakeholders.

In an ideal world, such succession planning would have been done far in advance by undertaking leadership development projects, meticulously among the senior management. There are several companies, which have an on-going leadership development programme and succession matrices for all contingencies and for all critical positions. In such progressive companies, succession planning and leadership development would not be disparate but integrated (for an inspirational argument on this particular point, see Developing Your Leadership Pipeline, by: Conger, Jay A., Fulmer, Robert M, Harvard Business Review, Dec2003, Vol. 81, Issue 12). In the absence of a strong leadership development program, there will be more and more recourse to external recruitment.

In the eventuality of external requirement, theory has given us some indication as to how an iterative sequence can be documented and followed. It involves three important steps, the first one being a close study of the job and the competencies required to perform and meet the objectives of the job. While the job specifications and competencies may remain constant through the stable period of an organization, there are occasions when new competencies may be required. For instance, if the company is facing aggressive competition in the market, some degree of competitive strategy from the marketing perspective may be a dominant competence required in the CEO. On the other hand, if the challenge is technology and its innovative absorption and new products, the competence that is relevant for leveraging technology will be more important than financial management.

Such competencies obviously are inclusive of generic personal attributes such as honesty, and integrity. If it is an academic institution, competences must include the ability to inspire research, assuming academic leadership and inspiring confidence in the potential “market”. A CNR Rao, a Mashelkar, a Abdul Kalam show us the importance of these competences. Where the CEO is assisted by a strong team of senior management and working directors, the specifications might be different than in a structure that is essentially led by the CEO and less by the other members of the senior management or the non-executive chairman.

After understanding the competence required, the next step involves generating a field of candidates by appropriate use of communication. Increasingly the announcement for CEOs is becoming transparent and well broadcast to generate a wide range of possibilities. The call may provide for both direct applications and referrals/nominations, should the position be so sensitive that eminent people are reluctant to apply. In recent times, positions which were considered as a prerogative of the Chairman or Board of Directors or the government are increasingly broadcast widely to generate a wider catch. An example often cited as a measure of transparency and wide canvassing is the advertisement by the Bank of England for a Non-Executive/Independent Director. It is only when the current CEO is required to be replaced silently through a coup that secrecy is adopted. Otherwise, it does not make sense that the field is narrow. Placement agencies are also a preferred route for the corporates in view of their long standing, the database they maintain and importantly, their ability to reach, communicate, and convince candidates to evince interest.

The third step obviously is the process of ascertaining, evaluating, and ranking the competencies amongst the candidates including the personal attributes. These, obviously are to be juxtaposed with the requirements determined in advance. Often, a selection team of seasoned and mature interviewers who can judge these competencies well are engaged in this process. Innovative companies even try not only the Assessment Centre methods but also hand-writing analysis, palmistry, and astrology! A let up at this stage might result in filling a hole in the organogram than selecting an inspiring leader. In the absence of seasoned analysts and a scientific approach, selections could become victims of irrelevant criteria including that of the so called “chemistry”, which often means conformance, sub-servience, cultural predictability that includes symmetry in region, religion, idiosyncracies, and prejudices. If chemistry is an argument, one has to go beneath to discover as to why it exists or does not exist in the candidate and whether it can be interpreted in terms of competencies.

In practice, the sequence can be tweaked to suit the interest of the controlling owner or a board member. One can rediscover competencies breaking away from the records and the manuals of job descriptions, and job specifications to tailor-make them for the candidates in mind. Better still, as it happens in many organizations, ensure that that there is no job description or job specifications, or competence profile at all. This will give enormous scope for those in control to massage them around to meet their own agenda. Show me the man and I will tell you the competence required for the job! If one is constrained at this stage for any reason, a second lever is in selecting the media or mode of announcements for recruitment i.e. by limiting the knowledge of vacancies so that levels of competition are controlled to make it comfortable for the pre chosen one.

If the controller were “deprived” at this stage, there is still a chance to design a selection team that will use intuitive methods than close discovery of competencies, their evaluation, analysis, and ranking. Such intuitive methods help in making sweeping judgmental statements in favour of those who need to be short-listed and a set of totally asymmetrical statements in respect of those who need to be shot down. Mute specialists can be used for form sake and to flavour the process with the requisite reputational characteristic.

The last resort, of course, is to dissuade the short listed candidates from accepting the offers by one means or the other or extracting statements that can be twisted around to meet ones desired conclusion. This process can be continued till the pre-chosen one emerges as the candidate.

In feudal regimes there is little need for masquerading. The feudals are the controllers and they can nominate whoever they desire. In the case of publicly traded companies which are truly widely spread with an active, transparent, and independent board of directors and assertive shareholders, the iterative sequence is followed well and the due process is also applied diligently. Such a process is also evident in some of the progressive not-for-profit organizations including hospitals, cooperatives, societies and public trusts where a detailed manual is adopted by the activist board and transparency is assured so that no particular stakeholder or the management is able to tamper with it to appoint one’s kith, kin, regents, underlings and related parties. It is apparent that the less transparent and less iterative the process is, the greater has been the need for exercising undue control and betraying the trust and fiduciary duty. The process of selection of the CEO could indeed be a proxy measure of the quality of corporate governance. If the CEO’s appointment is faulty, everything else that flows from him should obviously be warped to benefit a few.